transport network”. He adds that, rather than having negotiated rates for these, “we find it works well on Best Available Rate”. He also works closely with Red Bull’s
TMC, Click Travel, especially for hotels outside the capital, in cities including Man- chester, Glasgow, Edinburgh, Birmingham and Leeds. For Red Bull travellers across the UK there are eight specific city rates in place based “on rate analysis so we know the sensible cap to put in place that meets our business and traveller expectations.” Oliver adds: “Rate caps work well as not only do they control our costs but also let travellers take advantage of options that suit their requirements, such as parking or vicinity to meetings or customers.” The broader opportunity for mid-market (also known as mid-tier or midscale) hotels in the present business climate is also
highlighted by online hotel booking agency HRS. “The current environment presents opportunities for mid-tier hotels, as more travel buyers are confronting skyrocketing rate increases for 4-star and 5-star prop- erties,” says Lukasz Dabrowski, HRS senior vice-president of hotel solutions. “Mid-tier hotels would be wise to manage their inventory accordingly and engage with corporates who may be enticed by the com- bination of a lower price and attributes that are ideal for their travellers,” he adds. Dabrowski additionally points out that the mid-tier market “now offers a portfolio that has grown very business-savvy, focusing on corporate travellers’ needs and conveni- ence”. This can provide serious competition to 4-star hotels “which we have been observ- ing regularly in the course of the ongoing Request For Proposal season”.
MID-TIER
HOTELS WOULD BE WISE TO MANAGE THEIR INVENTORY ACCORDINGLY AND ENGAGE WITH CORPORATES
Below, from left: Travelodge SuperRoom; Holiday Inn Next Generation; Hub by Premier Inn. Right: Hub by Premier Inn auto check-in
REDUCING TRAVEL SPEND Mid-market hotels are also becoming popular with procurement managers because of the savings that can be made in comparison with traditional full-service chains, says Rachel Newns, hotel programme manager at FCM Travel Solutions. “These savings offer an attractive way to reduce overall travel spend without impacting on business activity and procurement managers are lowering rate caps to drive sales into this sector,” she adds.
But she warns that pricing is not always
transparent. “In my experience, hotels in the mid-market or value sector do not price in line with more traditional models. We have seen several examples of ‘budget’ pricing higher than a hotel brand within the same chain in similar locations, due to the demand they receive. Ultimately, hotels will manage their revenue to maximise income.”
buyingbusinesstravel.com
Whatever the pricing issues, the mid-market hotel sector remains something of an enigma. According to the Hotel Brands Report 2018, published by HotelAnalyst, only some 25 of the leading 100 European hotel brands were in the midscale or upper midscale markets (according to hotel chain- scales data collated by analytics company STR). Just eight brands were in the budget (economy) sector, with the remaining two-thirds in the upscale, upper upscale and luxury segments. Yet when Intercontinental Hotels Group
(IHG) recently launched its new mid-market hotel brand in Oklahoma City – Avid Hotel – it was a signal that the hotelier wanted to offer something different from existing centrist-focused chains that had become rather jaded in recent years. Avid Hotel’s 125-room property is clearly designed to appeal to the millennial
2018 NOVEMBER/DECEMBER 105
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